Bill to restore Medicaid cuts advances in Senate, would charge large insurance companies more to do business in Kansas

Topeka  The Kansas Senate advanced a bill Wednesday aimed at restoring the 4-percent cut in Medicaid reimbursement rates that Gov. Sam Brownback ordered last year. But a last-minute change to the bill makes it unclear when hospitals, nursing homes and other providers will start seeing the increased payments.

The Senate bill calls for increasing the privilege fees that certain insurance companies known as health maintenance organizations, or HMO's, pay for the right to do business in Kansas. That group includes the three companies that manage the state's privatized Medicaid program known as KanCare, plus a few others.

Under current law, those companies pay a fee of 3.31 percent on the premiums they charge to their members in Kansas. That rate is scheduled to drop to 2 percent on Jan. 1, 2018.

The bill, as it came out of committee, called for raising that to 5.77 percent, retroactive to Jan. 1 of this year, and leaving it at that rate through the year 2020, then lowering it back down to 3.31 percent in 2021.

It was estimated that would generate about $104 million in the fiscal year that begins July 1, and $145 million the following year.

However, Sen. Rick Billinger, R-Goodland, offered an amendment on the floor of the Senate to remove the retroactive provision, something the insurance companies had objected to, so the higher fee would not take effect until July 1. The motion passed on a voice vote.

It wasn't immediately clear Wednesday afternoon how much of an impact that would have, either on the amount of fees the state would collect or the amount of federal matching funds that would be lost by the delay.

Billinger also offered another amendment to reduce the size of the fee hike to just 5.66 percent instead of 5.77 percent. He said he had been told by the insurance companies that the lower amount would be sufficient to enable the state to restore the cuts. That motion, however, failed on a voice vote.